GOI is pushing for a valuation of about Rs 15 trillion ($203 billion) for LIC that’s soon expected to file for the nation’s biggest initial public offering, people familiar with the matter said, even as arrangers awaited a final report on the firm’s estimated worth.
The so-called embedded value of Life Insurance Corp. of India is likely to be more than Rs 4 trillion, and its market value could be about four times that amount, the people said, asking not to be identified as the discussions are private. Once the final report is in, the valuation the government is seeking could change.
Embedded value, a key metric for insurers, combines the current value of future profits with the net value of assets. The gauge will be part of LIC’s IPO prospectus that’s likely to be filed in the week starting Jan. 31. Typically, the market value of insurers is between three and five times the embedded value.
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